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Economix: Podcast: Executive Pay, the World Bank and Twitter’s New Home

July 2, 2011 by Leave a Comment

Big paydays are back for American chief executives.

In a cover article in the Sunday Business section, P.J. Joshi reports that a study conducted for The New York Times by Equilar, an executive compensation data firm, showed that the median pay for top executives at 200 big companies last year was $10.8 million, a gain of 23 percent from 2009.

In the new Weekend Business podcast, David Gillen and Ms. Joshi discuss the trends in C.E.O. pay, which hasn’t returned to its heady, prerecession levels, but certainly seems on its way there. Pay skyrocketed last year because many companies brought back cash bonuses, which jumped 38 percent.

And at a time of so much tumult in the media business, it might be surprising that some executives in media and communications were among the most richly rewarded last year, led by Philippe P. Dauman, the chief of Viacom, who made $84.5 million after signing a new long-term contract that included one-time stock awards.

In a separate podcast conversation, Stephanie Strom discusses a quiet revolution under way at the World Bank, whose traditional role has been to finance specific projects that foster economic development. In an article for Sunday Business, she reports that the bank’s president, Robert B. Zoellick, argues that its most valuable currency isn’t its money — it is its information.

For more than a year, the bank has been releasing its prized data sets — previously available only to paying subscribers, mostly governments and researchers — with all sorts of information about the developing world. Whatever its accuracy or biases, this data essentially defines the economic reality of billions of people and is used in making policies and decisions with an enormous impact on their lives.

Meanwhile, in a closely watched experiment, San Francisco is offering tax breaks to technology companies that move their offices to the city’s blighted neighborhoods. Twitter will be the first to take advantage of the program when it moves into new offices on a particularly desolate section of Market Street next year. Phyllis Korkki and Damon Darlin discuss whether those urban employees, accustomed to never leaving their offices in Silicon Valley, will leave the building often enough to significantly improve the neighborhood.

You can find specific segments of the podcast at these junctures: executive compensation (22:27); news summary (15:21); the World Bank (12:54); the streets of San Francisco (6:11); the week ahead (1:16).

As articles discussed in the podcast are published during the weekend, links will be added to this post.

You can download the program by subscribing from The New York Times’s podcast page or directly from iTunes.

Article source: http://feeds.nytimes.com/click.phdo?i=118dfc2e193bfa0761f99d84ea524bf3

Filed Under: Economy News Tagged With: ,

DealBook: Mark Haines, CNBC Anchor, Dies at 65

May 25, 2011 by Leave a Comment

Mark Haines, an anchor at CNBC who for years narrated the vicissitudes of the markets, died on Tuesday evening at his home in Marlboro, N.J., the network said on its Web site. He was 65.

CNBC did not disclose the cause of death.

A longtime TV news veteran who did stints in New York City and Philadelphia before attending law school, Mr. Haines joined the then-fledgling CNBC in 1989 and became one of the network’s most prominent faces.

In 1995, he became the first host of “Squawk Box,” helping to develop the early-morning show into must-see viewing for Wall Street, leavening discussions about fast-moving stocks with banter about pop culture and personalities.

In 2005, he became the co-host of another CNBC morning show, “Squawk on the Street,” with Erin Burnett. (Earlier this month, Ms. Burnett left the network to join CNN.)

From the beginning, Mr. Haines did not fit the mold of a traditional TV anchor. (A 2000 article in Fast Company described his rumpled look as “a butcher forced to wear a business suit,” and colleagues remember his off-camera uniform often including sweatpants, mussed hair and bare feet.) But he became known as a curmudgeonly, if wry, emcee. He also developed a reputation as a sometimes sharp-tongued interviewer, bluntly battling with guest chief executives over their companies.

His CNBC colleague David Faber said that Mr. Haines’s beginnings as a reporter covering corruption in Providence, R.I. helped inform that rough-and-tumble approach.

“There were those unexpected moments in interviews when he would be relentless and ferocious and not take no for an answer,” Mr. Faber said in a telephone interview. He added that such skepticism helped establish a foundation of integrity in CNBC’s news coverage.

Mr. Haines’s demeanor helped model a kind of personality that appealed to financial executives, one that has since become less uncommon across the dial.

“If we don’t get people who watch, we’re out of business,” he told The Chicago Tribune in 1998. “At the same time, you have to have a core of people who understand business.”

Joe Kernen, who co-hosted “Squawk Box” with Mr. Haines, said that his colleague’s influence on CNBC stretched well beyond the morning, given his presence at the network from its inception.

“His fingerprints were on everything,” Mr. Kernen said in a telephone interview.

Mr. Kernen pointed to Sept. 11, 2001 as Mr. Haines’s single most important day as an anchor, when he calmly reported on developments about the terrorist attacks on the World Trade Center.

Jim Cramer, the CNBC host, sent this in an e-mail:

Mark Haines was our Huntley, our Brinkley, our Cronkite all rolled up into one giant of a business journalist. He was the first business journalist ever to ask a C.E.O. a hard question that I had ever seen. When I met him 15 years ago, I was scared to death of him. I was a guest co-host. He said to me when he shook my hand, “No free passes, to you or anyone else.” He stayed that way. Forever.

Mr. Haines was “the nicest gruff guy you will ever meet,” Jonathan Wald, formerly CNBC’s senior vice president of business news, wrote on Twitter on Wednesday morning. Mr. Wald added that the anchor “epitomized the brand, loved the news, cared deeply.”

Phil LeBeau, CNBC’s autos correspondent, also wrote on Twitter, “His wit and tough approach to handling interviews will be missed.”

Mark S. Haines was born on April 19, 1946 and grew up in Oyster Bay, N.Y. He graduated from Denison University in 1969 and from the University of Pennsylvania Law School in 1989.

He is survived by his wife, Cindy, and two children, Matthew and Meredith.

Below is the internal CNBC memo on Mr. Haines’s death:

It is with deep regret and a heavy heart that I let you know that Mark Haines passed away last night in his home.

I know all of you join me in sending our heartfelt condolences to Mark’s wife, Cindy, his son, Matt, and his daughter, Meredith.

Mark has been one of the building blocks of CNBC since the very beginning, joining us in 1989. With his searing wit, profound insight and piercing interview style, he was a constant and trusted presence in business news for more than 20 years. From the dot-com bubble to the tragic events of 9/11 to the depths of the financial crisis, Mark was always the unflappable pro.

Mark loved CNBC and we loved him back. He will be deeply missed.

When we have details on the arrangements, I will communicate them to you.

Evelyn M. Rusli contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=9d3328429715fb66b9202bd4f2718454

Filed Under: Business News Tagged With: , ,

Executive Pay: A Special Report: The Drought Is Over (at Least for C.E.O.’s)

April 9, 2011 by Leave a Comment

After shrinking during the 2008-9 recession, paychecks for top American executives are growing again — in many cases, significantly so.

Rarely has the view from the corner office seemed so at odds with the view from the street corner. At a time when millions of Americans are trying to hang on to homes and millions more are trying to hang on to jobs, the chief executives of major corporations like 3M, General Electric and Cisco Systems are making as much today as they were before the recession hit. Indeed, some are making even more.

The disparity is especially stark as companies are swimming in cash. In the fourth quarter, profits at American businesses were up an astounding 29.2 percent, the fastest growth in more than 60 years. Collectively, American corporations logged profits at an annual rate of $1.678 trillion.

So far, this recovery has not trickled down. After two relatively lean years, C.E.O.’s in finance, technology, energy and beyond are pulling down multimillion-dollar paychecks. What many of these executives aren’t doing, however, is hiring. Unemployment, although down from its peak, stood at 8.8 percent in March. And few economists predict the jobless rate will drop substantially anytime soon.

For the average C.E.O., however, the good times have returned. The median pay for top executives at 200 major companies was $9.6 million last year. That was a 12 percent increase over 2009, according to a study conducted for The New York Times by Equilar, a compensation consulting firm based in Redwood City, Calif.

Many if not most of the corporations run by these executives are doing better than they were in the downturn. Many businesses were hit so hard by the recession that even small improvements in sales and profits look good by comparison. But C.E.O. pay is also on the rise again at companies like Capital One and Goldman Sachs, which survived the economic storm with the help of all those taxpayer-financed bailouts.

Against such a backdrop, it’s noteworthy that recent moves to empower shareholders seem to have done little to tamp down corporate enthusiasm for paying top dollar to top executives. This is generally the season when companies hold annual meetings for their shareholders.

Under new rules included in the Dodd-Frank financial regulations, nearly all public companies must now give shareholders a say on executive pay. Analysts and corporate governance experts are wondering how these votes will play out, even though companies are under no obligation to heed their shareholders’ advice.

“What’s funny about pay is that when the market is going up, it covers a lot of sins,” said David F. Larcker, director of the corporate governance research program at the Stanford Business School. It is when the market “is going sideways or down that funny things happen,” he said: “Considering some of the current pay packages, shareholders want to see strong results.”

On this year’s list, the highest-paid C.E.O. was Philippe P. Dauman of Viacom, who made $84.5 million in just nine months. (Viacom changed its fiscal year-end to September from December.)

Viacom has said that the compensation was inflated by one-time stock awards linked to a long-term contract signed last year.

Also at the top was Ray R. Irani, the C.E.O. of Occidental Petroleum, who took home $76.1 million last year, up 142 percent from the previous one. Last year, the board awarded Mr. Irani a $33 million cash bonus plus $40.3 million in stock awards, more than double what he received in 2009.

Mr. Irani is retiring this year, and Occidental has said that it has set higher hurdles that will significantly reduce executive pay packages.

Lawrence J. Ellison of Oracle, the software giant, followed close behind, with a $70.1 million payout, though that is down 17 percent from 2009. Still, Mr. Ellison’s fortunes are just fine: he had more than $26.3 billion in stock and other holdings in Oracle in 2010.

UNLIKE some previous years, 2010 registered broad gains in executive pay, benefiting C.E.O.’s from nearly all parts of the economy.

Many consumer products companies also offered rich pay packages, including one for John F. Lundgren, chief executive of Stanley Black Decker, whose pay rose 253 percent, to $32.57 million, after a huge stock award. His counterpart at Emerson Electric, David N. Farr, saw his pay rise 233 percent, to $22.9 million, also because he was granted millions in stock.

Most executive compensation plans consist of stock options that ballooned as markets recovered after the financial crisis. Although executives typically have to wait several years before cashing in new options, the booming stock market still meant that those options were a bonanza for many chiefs, said Bruce H. Goldfarb, a compensation consultant based in New York.

The chief executive of Ford Motor, Alan R. Mulally, made $26.5 million in total pay, up 48 percent over the previous year as a result of big stock option awards. Ford was the only one of Detroit’s Big Three automakers that did not receive a government bailout, and its stock value rose 68 percent last year.

New government regulations put in place after the financial crisis have emboldened some activist shareholders to try again to rein in compensation they deem excessive and undeserved. Although companies will not be bound by such votes, they will have to disclose the results in reports filed with the Securities and Exchange Commission, as well as how they considered the voting in setting subsequent executive pay.

Still, it remains to be seen whether these changes have any teeth. For “say on pay” votes, there is no standard for what percentage of shareholder votes constitutes an endorsement or a rebuttal of policies. Even the prospect of the public votes, though, appears to have altered the relationship between investors and corporate executives on many discussions in recent months.

Article source: http://feeds.nytimes.com/click.phdo?i=d70d7efe0ee89eb3ff40c568d3cd1d49

Filed Under: Business News Tagged With: , ,

DealBook: France Sees Surge in Foreign Investments

March 29, 2011 by Leave a Comment

Christine Lagarde, France's economy minister.Munshi Ahmed/Bloomberg News Christine Lagarde, France’s economy minister, says 2010 was a “record-breaking year” for foreign investment.

PARIS — The French economy is popularly viewed as sclerotic and sheltered, but government data released Monday — as well as the testimony of a number of global chief executives — suggest the opposite.

Italians, though, might beg to differ.

A report from the government’s Invest in France Agency showed that the number of foreign direct investments rose 22 percent last year from 2009, to 782 projects creating 31,000 jobs. It was the highest number in 15 years and came after stagnation for the two previous years.

Christine Lagarde, the economy minister, described 2010 as a “record-breaking year” for investments, most of which came from Germany, followed by the United States, Britain and Italy.

She said the government had become more attentive to the needs of foreign-owned companies and had improved the investment environment through means including the creation of research tax credits; the elimination of a local business tax; the establishment of a tax-free overtime system; the investment in infrastructure, especially around Paris; and the promotion of so-called centers of excellence where companies in related fields can work side by side.

And at a reception Monday in Paris, a number of foreign executives joined Ms. Lagarde in extolling the virtues of France as more than a vacation destination.

One of those — Robert Lu, chairman of China National BlueStar, a chemical company — said he had found France far more welcoming than Germany. “The French government are very open to attract investment,” he said. “That is the difference compared with Germany.”

He said his company had invested 200 million euros, or about $280 million, in France over the past four years and intended to spend an additional 130 million euros this year.

But Italian executives have long complained that France has thrown up roadblocks to their efforts to expand into France, and a battle now going on between companies from the two countries has revived memories of past clashes.

Lactalis, a privately held company based in Normandy and the largest cheese and milk producer in Europe, has been accumulating shares in the giant Italian food company Parmalat. And now Lactalis is starting to encounter barriers to extending its control. Lactalis said last week that it planned to buy a 15.3 percent stake in Parmalat from a group of activist investors and then to increase its stake to 29 percent.

Soon after, however, it emerged that the Milan prosecutor was investigating Parmalat’s recent stock movements. In addition, Rome has issued a decree allowing Parmalat to delay a shareholder meeting scheduled for April, during which Lactalis was expected to consolidate its control. The Italian government has also called for an “Italian solution” for Parlamat, and a consortium of domestic companies is being pulled together to make a bid for the company.

The defensive stance stems from the belief among many Italian executives and politicians that when it comes to investment and mergers involving France, the traffic is all one way.

In 2006, the French government engineered a merger between the water utility Suez and Gaz de France to prevent Suez from being acquired by Enel, the Italian energy giant.

That same year, BNP Paribas of France bought Italy’s Banca Nazionale del Lavoro. In 2009, Air France-KLM took a minority stake in the Italian flag carrier Alitalia. And this month, LVMH Moët Hennessy Louis Vuitton, the French luxury goods conglomerate, announced that it would buy the Italian jeweler Bulgari.

Several other French companies, including the electric utility EDF and the insurance company Groupama, are also looking into expanding their holdings in Italian rivals.

Ms. Lagarde denied there was an agenda at work. “We haven’t barred any Italian from investing in France,” she said. “There might be frustration regarding the level of foreign direct investment in flagship companies, and that is perfectly understandable. It’s a matter of really having a dialogue.”

But there remains a lingering sense among many analysts that France does not always open its arms to foreign investors, whether from Italy or elsewhere, if it means giving up control of well-known French companies.

In 2005, rumors that PepsiCo would bid for Danone, the big French food and drink company, set off a backlash, with Dominique de Villepin, then prime minister, calling for “economic patriotism.”

A few months later, the French government published a list of 11 sectors deemed vital to national security, and said it would protect companies in those areas from foreign takeovers. The list includes casinos. PepsiCo never made a bid.

In 2009, Areva, the state-controlled French nuclear company, sold its electrical grid business to a group of French companies rather than to General Electric of the United States and Toshiba of Japan, even though the foreign companies had offered sweeter deals.

Ms. Lagarde said that when it came to foreign takeovers, France differed from other countries only in its approach. “Compared with other countries we are specific, we don’t have leeway, we don’t have discretion,” she said.

It is not only French data that show that the country has become a top player in global investment flows. According to the United Nations Conference on Trade and Development, in 2009 France ranked third globally for foreign investment inflows, behind the United States and China. It slipped to fourth place in 2010, when Hong Kong pulled ahead.

Data from the U.N. body also show France as the second-largest provider of foreign direct investment in 2009, at $147 billion, ranking behind the United States, at $248 billion, but ahead of Japan, Germany and China.

Among the foreign companies that have expanded in France in the past year are Amazon.com and General Electric, Bertelsmann of Germany and Nestlé of Switzerland.

While France retains a reputation for a rigid labor market, many of the executive said Monday that this was often outweighed by positive factors, including a large domestic market, low-cost energy, good infrastructure and well-trained workers.

“We decided to stay here for the full picture,” said Luiz Fuchs, chief executive of the European operations of Embraer, the Brazilian aircraft company, which has been operating in France for almost 30 years. “Yes, we would like to have more flexible labor laws, but I think the overall picture fits very well.”

Hans-Paul Bürkner, chief executive of the Boston Consulting Group, said most of Europe, not only France, “has a challenge” and must overcome the “mentality” of protecting old jobs rather than creating new ones.

“You may, with flexibility, lose some jobs short term, but in the long term you create more opportunities,” he said. “We have to overcome that dilemma.”

Stephen A. Schwarzman, chief executive of the private equity firm Blackstone Group, said he would like to hold more French assets. “It’s not the easiest place to buy,” he said. “It’s a good place to own.”

He estimated that France’s labor costs were lower than those of Germany, where “they take plenty of vacation and they seem to do quite well as a manufacturing economy.”

Article source: http://dealbook.nytimes.com/2011/03/28/france-sees-surge-in-foreign-investments/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,
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